A Power Division proposal for extending the tenure of loan agreement for a major China-funded power project under DPDC domain comes under question, as implementation timing escalates further.
Sources have said the Economic Relations Division has questioned the justification for extending the loan-agreement time for the 'Expansion and Strengthening of Power System Network under DPDC Area' project.
The US$1.6-billion project is the largest power- cooperation project between the two governments of Bangladesh and China since the establishment of diplomatic ties between the two countries.
In response to a Power Division letter for extending the project till December 2026, the ERD said the reasons cited by the Power Division were not found as 'strong' and 'justified'.
Started in 2019, the project was extended for 30 months earlier and is scheduled to end in June this year.
It also mentions that the China Exim Bank, which is funding the project, does not cater a such request for loan extension unless there is strong reason.
Earlier, the Power Division in a letter informed the ERD that though the tenure of the loan agreement will end in June this year, the project cannot be completed in time.
Several reasons cited, including COVID-related disruptions, delay in project designing and failure of the government in completing the land acquisitions in due time.
The loan agreement was signed in 2019.
Talking to the FE correspondent, an official of the Power Ministry said that delay in land acquisition is a major cause for the project delays.
Earlier, an official of China's TBEA company had said that the project was on track and expressed the hope to finish the project in time.
More than 70 per cent of the project works have been completed to date, the official told the FE in July last year.
TBEA is working on a subproject as part of a larger US$1.65-billion initiative.
'The power system of Dhaka city and its adjacent area in Narayanganj will undergo a significant transformation with the full implementation of the "Expansion and Strengthening of Power System Network" project, serving as the cornerstone of a digital Dhaka city,' he said.
The project was awarded to the Chinese Tebian Electric Apparatus (TBEA) Co Ltd.The works of the crucial project include construction of 40 sub-stations and boosting the capacity of existing 12 sub-stations.
The project also includes a Scada (Supervisory Control and Data Acquisition) automation system, a modern training system and machined warehouse.
Besides, construction of 653km 132kV and 700km 33kV underground cable line is also included in the project.
DPDC, one of the six power-distribution companies in the country, is responsible for supplying electricity in the southern part of Dhaka and Narayanganj city.
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